What happens when the franchise agreement ends?

The franchisee must stop using the brand, know-how and visual identity. The agreement should define a post-term non-compete and conditions for returning materials.

Can I sell my franchise?

Only with the franchisor's consent. The franchise agreement typically includes a transfer prohibition without written consent and a right of first refusal for the franchisor.

What is a franchise marketing fund and must I contribute?

A marketing fund (franchise fund) is a joint fund for central advertising and network marketing, financed by franchisee contributions (usually 1–3 % of revenue). The obligation to contribute must be in the contract.

What happens to my business after the franchise agreement ends?

The franchisee must stop using the brand, visual identity and know-how. In some cases the franchisor has a right of first refusal to buy the franchisee's business. The terms are defined in the contract.

Corporate

Franchise agreement

Franchise agreement — open a branch, not a business from scratch

Brand rights, know-how, royalties and quality standards.

Start free Features

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Franchise businesses have a 36 % higher survival rate after 5 years than independent businesses

The average initial investment in a franchise is €50,000–€200,000

92 % of active franchises have a written franchise agreement

A franchise agreement covers the brand and know-how licence, operational manuals, royalties, marketing fee, exclusive territory and quality standards. AI generates it for single and multi-unit operators.

Legal context

A franchise agreement is an unnamed commercial contract. The European Franchise Federation Code of Ethics sets ethical standards, though it is not legally binding. EU antitrust rules restrict pricing clauses in franchise agreements.

Commercial Code § 269(2) — unnamed contract; TFEU Art. 101 restricts pricing clauses in franchise agreements

Legal basis & glossary

When to use a Franchise agreement

When building a franchise network for your own brand
When entering an existing franchise system as a franchisee
For expanding a restaurant, retail or service concept
For a master franchise covering an entire region or country

What you get

Brand and know-how licence
Royalties and entry fee
Exclusive territory
Quality standards and audits

How it works

From idea to signature

Brand and know-how licence

Royalties and entry fee

Exclusive territory

FAQ

Frequently asked questions about Franchise agreement

A royalty is a regular fee paid by the franchisee to the franchisor for use of the brand and system, typically a percentage of revenue (usually 3–10 %).